Self-regulation, not a royal commission: FSC

The financial services industry is “uniquely placed to take up the mantle of consumer reform”, while a royal commission would create unnecessary costs and “go off at tangents”, the FSC has said.

In a statement last week, chief executive officer of the FSCSally Loane said a royal commission into the financial services sector would prevent self-regulation and the opportunity to build consumer trust.

“We are uniquely placed to take up the mantle of consumer reform so that the government can get on with its job of governing. Proving as an industry we can regulate ourselves also strengthens consumer trust in the sector. In this light, we are concerned about a proposal that could act as a handbrake on self-regulation,” Ms Loane said.

According to the FSC, inquiries into the financial services sector have cost the industry more than $3 billion since the global financial crisis.

“Any continuing reforms and changes in financial services are always needed quickly to keep up with the fast rate of change in the industry, not least because of technology and the rapidly changing needs and expectations of the community,” Ms Loane said.

“Royal commissions are a slow process, only look at past practice and inevitably go off at tangents.”

Ms Loane said the financial services industry has already introduced standards and codes in recent years to help deliver value, build trust in the community and reduce the cost to Australians of managing financial affairs.